ABC corporation has outstanding bonds with a face value of $1,000 that mature in ten years. The coupon rate is 9% and co

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ABC corporation has outstanding bonds with a face value of
$1,000 that mature in ten years. The coupon rate is 9% and coupons
are paid semiannually.
(A) Suppose market interest rates rise, so that investors
require a return of 12% on ABC bonds. What is the intrinsic
value of the bond if it is priced to yield 12%?
(B) Suppose you purchased an ABC bond at its
82.75 quoted market price. Now, interest rate have fallen and
investors require a return of 9% on these bonds. If you sell
the bond when it is priced to yield 9%, what is your gain or
loss?